Freightways, the express package and information management company, has agreed to buy Iron Mountain Incorporated's New Zealand subsidiary for $12.7 million.
The deal, which is effective from October 1, will see Iron Mountain New Zealand's operations absorbed into Freightways' Online Security Services subsidiary, the company said in a statement filed with the NZX today.
''This acquisition is consistent with Freightways' growth strategy to acquire complementary businesses and to increase its penetration in the information management market,'' the company said.
Information management has been an increasingly important part of Freightways' balance sheet, accounting for about 21.6 per cent of the $352.5 million in revenue earned in the year ending June 30 2011.
The company reported a bottom line profit of $29.9 million in the year, up 29 per cent on the previous period.
Freightways estimates Iron Mountain NZ will generate $12 million in first year of ownership, with earnings before interest, tax, depreciation, and amortisation of $1.5 million before savings from synergies between the two businesses are factored in.
The acquisition is expected to be immediately earnings per share positive, the company said.
The costs of integration are expected to come in at $1 million, with the capital expenditure for the merger and the acquisition funded out of Freightways' existing debt facilities, which the company said will leave it with a debt to debt and equity gearing ratio of about 48.5 per cent.
Freightways shares rose 0.6 per cent to $3.22, and have gained 7.7 per cent so far this year.
- BusinessDesk
03 Oct, 2011--
Source: http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNFkC5VPyIoONl-bkP9_ZengaCoM6w&url=http://www.stuff.co.nz/business/industries/5724786/Freightways-picks-up-Iron-Mountain-NZ
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